AAT responds to Budget announcements on Capital Gains Tax reporting, R&D tax relief and minimum wage

AAT has responded to the Autumn 2021 Budget and Spending Review announcement today by the Chancellor Rishi Sunak.

Among the key issues covered in the Budget (PDF) were an extension on Capital Gains Tax (CGT) reporting from 30 to 60 days, further tax relief for research and development (R&D) and an increase in the National Living Wage to £9.50 an hour. The Chancellor also announced additional investment in apprenticeships and skills and changes to Air Passenger Duty (APD).

Adam Harper, Director of Professional Standards and Policy, AAT, said: "Since the change to 30 days came into effect last year, AAT has repeatedly highlighted its members' concerns, particularly AAT Licensed Accountants, with the unreasonable nature of a 30-day timeframe for reporting qualifying CGT liabilities.

"AAT was convinced that the most effective solution to this problem would be to double the reporting period from 30 to 60 days. That's what we spoke to various stakeholders about and made representations to treasury ministers and provided a Budget submission on, so naturally we are very pleased that they've listened and acted accordingly.

"We were also happy to see the confirmation that data and cloud computing costs will be included in qualifying expenditure for R&D tax relief, which we called for in our consultation response earlier this year, along with other measures to support small businesses.

"Additionally, we welcome the planned increases to the National Living Wage – ensuring everyone gets a fair day's pay for a fair day's work – which was overwhelmingly backed by AAT members, and the government's ongoing commitment to lifelong learning through expanding the Lifetime Skills Guarantee and increased funding for apprenticeships.

"However, we were disappointed by the announcement of an increase in APD for long haul flights while reducing the duty payable on domestic flights – something we had previously urged the government not to do. Whilst the government is keen for the narrative to focus on increased APD for long haul flights, slipping in a reduction for domestic flights under the radar, it's important to understand that domestic and other short-haul flights are the most carbon intensive form of travel and emit more CO2 per person per mile than long haul flights.

"As a result, the decision to cut APD for domestic flights flies in the face of a wealth of national and international evidence about just how environmentally damaging this will be and seriously undermines the UK's credibility just a few days before COP26 begins. There can be no doubt that this contradicts and greatly weakens government policy on seeking to reach 'net zero' by 2050."

As individuals and small businesses prepare for the tax changes announced today by the Chancellor to come into effect, AAT is calling on the government to make it mandatory for anyone offering paid for tax or accountancy services to be a member of a relevant professional body as part of its ongoing Accountable campaign. This will ensure that consumers receive reliable, up-to-date advice and that there are procedures in place to support them if things go wrong. More information about this campaign, including the free consumer guide, What you need to know before appointing an accountant, is available on AAT Comment.